Vascular complications due to diabetes mellitus (DM) are the result of sustained vascular injury with insufficient vascular repair. In chronic diabetes, vascular reparative mechanism can be lost resulting in development of microvascular complications (MVC), such as diabetic retinopathy (DR). We assessed the reparative function of progenitor cells that circulate in the peripheral blood of diabetic individuals and found that the vascular wall-derived progenitor cells, endothelial colony forming cells (ECFCs), were depleted in diabetics with MVC. Bone marrow- derived progenitor cells, CD45+CD34+ were dysfunctional in diabetics with MVC. We found that human inducible pluripotent stem cells (hiPSCs)-derived ECFCs displayed the ability to form functional and durable blood vessels in vivo and conferred therapeutic revascularization by connecting with and remaining integrated with host rodent vessels long term. We characterized a mesoderm subset (SSEA5-KNA+ cells) generated from hiPSCs that gives rise to ECFCs. Finally, we used hiPSCs to generate CD34+CD45+ cells and tested the impact of co- administration of these cells with ECFCs within the vitreous. The addition of CD34+CD45+ cells with ECFCs resulted in the enhanced survival, function and reparative ability of the ECFCs. This beneficial effect was mediated by reducing retinal oxidative stress and inflammation. These novel and paradigm shifting findings led us to hypothesize: the hiPSC-derived- mesoderm subset (SSEA5-KNA+) can be utilized for long term revascularization of vasodegenerative capillaries and their reparative action can be further enhanced by coinjection of CD34+CD45+ cells that provide anti-oxidant and anti-inflammatory effects. Three aims will test this hypothesis: Aim1: To determine whether hiPSC-derived SSEA5- KNA+ cells generated from either healthy donors or diabetic donors can give rise to ECFCs and pericytes to repair retinal vessels in mouse models of DR. Aim 2: To generate CD34+CD45+ cells from diabetic or control iPSCs and examine whether they enhance the function of SSEA5- KNA+ cells when co-injected into mouse models of DR. Aim 3: Our hypothesis predicts that hiPSC-derived SSEA5-KNA+ cells and CD34+CD45+ cells in combination can optimally support vascular repair in a Western diet-induced type 2 diabetic primate model of DR. The outcome of this work will provide a paradigm-changing approach for autologous cell therapy by optimizing the use of hiPSC-derived cells to enable highly efficient production of vascular cells for tissue/organ-based vascular repair. !